Sri Lanka's inflation eases to 6.1% in July

Sri Lanka's inflation rate declined marginally in July to 6.1 percent from 6.8 percent in the previous month, latest data released from the Central Bank showed here on Thursday, but fresh tax increases are likely to push up consumer prices in August. The inflation rate on an annual average basis also decreased to 8.3 percent in July from 8.6 percent recorded in the previous month. However, Sri Lanka's government on Wednesday increased taxes on a range of items including cigarettes, alcohol, vehicle spare parts and dairy items, which is very likely to will push up inflation rates for August. Core inflation on both year-on-year and annual average basis continued to decline to 3.1 percent and 6.2 percent in July, respectively, from 4.3 percent and 6.4 percent, respectively, in June 2013. The contribution to the monthly increase in the index came mainly from price increases (by 0.2 percent) in the Food and Non Alcoholic Beverages sub-category. "Within the Food category, the price of some varieties of vegetables, fruits and fresh fish, potatoes, big onions, red onions and limes increased during the month," the Central Bank said. However, a decrease in the price of many varieties of vegetables and fresh fish, green chilies and eggs was reported. Within the Non-Food category, a 0.5-percent increase in prices was reported in the sub-categories of Transport, while a 0.2- percent rise was witnessed in Clothing and Footwear , as well as a 0.1-percent increase for Miscellaneous Goods and Services.